A Roth IRA is an Individual Retirement Account to which you contribute after-tax dollars. … While there are no current-year tax benefits, your contributions and earnings can grow tax-free, and you can withdraw them tax- and penalty-free after age 59½ and once the account has been open for five years.
Also, is an IRA the same as a retirement plan?
An IRA is an account set up at a financial institution that allows an individual to save for retirement with tax-free growth or on a tax-deferred basis. … Rollover IRA – You contribute money “rolled over” from a qualified retirement plan into this traditional IRA.
Furthermore, why a Roth IRA is a bad idea?
Roth IRAs offer several key benefits, including tax-free growth, tax-free withdrawals in retirement, and no required minimum distributions. An obvious disadvantage is that you’re contributing post-tax money, and that’s a bigger hit on your current income.